IBC's Beryllium Alloy Division Discontinues Operations as IBC Shifts to a Potential Expansion of its Indiana-Based Copper Alloys Business
FRANKLIN, IN / ACCESSWIRE / September 5, 2024 / IBC Advanced Alloys Corp. ("IBC" or the "Company") (TSX-V:IB)(OTCQB:IAALF) announces that its Massachusetts-based beryllium-aluminum alloy facility has successfully completed all work on its final production contracts and has discontinued operations.
IBC is now focused on growing its Copper Alloys division in Franklin, Indiana and anticipates that the discontinuation of its beryllium-aluminum alloy based Engineered Materials ("EM") division will expand free cash flow. IBC's remaining operating division -- Copper Alloys -- has enjoyed a favorable trend in revenues and gross profit since October 2022, much of which is attributable to the consolidation of its operations in one plant.
The Copper Alloys division operates a vertically integrated copper alloy production facility in Indiana, which takes raw material through foundry, forge, and rough and final machining. Since navigating the market disruptions of the COVID pandemic, consolidating three copper alloy plants into one facility in 2022, and completing construction of its modernized and expanded production facility in Franklin, Indiana. in 2022, the division has increased revenue, improved its gross profit and gross margin.
"This strategic shift in our business focus is the right thing to do and comes at the right time, especially as demand for copper and copper alloys continues to strengthen, a trend that is reflected by strong demand, with worldwide copper production up over 25% over ten years, and strong prices," said Mark A. Smith, Chairman and CEO of IBC. "With our modernized and expanded copper alloy production facility in Indiana fully operational, we see significant upside to expanding the copper business further."
As previously announced on April 25, 2024, the Company's decision to discontinue EM's operations was driven primarily by insufficient long-term demand for cast beryllium-aluminum alloy products and the resulting continuing losses. EMC's history of net losses depleted available working capital for the Copper Alloys division at a time when demand for copper alloy products was growing. The Company expects to incur a charge to operations in respect of the Massachusetts plant closure and is negotiating with suppliers and its landlord to minimize such costs.
On Behalf of the Board of Directors:
"Mark A. Smith" Mark A. Smith, CEO & Chairman of the Board
IBC is a leading advanced copper alloys manufacturer serving a variety of industries such as defense, aerospace, automotive, telecommunications, precision manufacturing, and others. At its vertically integrated production facility in Franklin, Indiana, IBC manufactures and distributes a variety of copper alloys as ingot castings and custom forgings, including beryllium copper, chrome copper, and aluminum bronze. The Company's common shares are traded on the TSX Venture Exchange under the symbol "IB" and the OTCQB under the symbol "IAALF".
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of this news release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain information contained in this news release may be forward-looking information or forward-looking statements as defined under applicable securities laws. Forward-looking information and forward-looking statements are often, but not always identified by the use of words such as "expect", "anticipate", "believe", "foresee", "could", "estimate", "goal", "intend", "plan", "seek", "will", "may" and "should" and similar expressions or words suggesting future outcomes. This news release includes forward-looking information and statements pertaining to, among other things, the Company's belief that the discontinuation of its EM division will expand free cash flow, that the Copper Alloys division will be successful in increasing revenue, improving its gross profit and gross margin, that the Copper Alloys division will continue to expand its business, and that the Company will incur a charge to operations in respect of the Massachusetts plant closure and will be successful in negotiating with suppliers and its landlord to minimize such costs. Forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control including: the impact of general economic conditions in the areas in which the Company or its customers operate, including the semiconductor manufacturing and oil and gas industries, risks associated with manufacturing activities, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, limited availability of raw materials, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. As a result of these risks and uncertainties, the Company's future results, performance or achievements could differ materially from those expressed in these forward-looking statements. All statements included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on assumptions made by the Company based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.
Please see "Risks Factors" in our Annual Information Form available under the Company's profile at www.sedar.com, for information on the risks and uncertainties associated with our business. Readers should not place undue reliance on forward-looking information and statements, which speak only as of the date made. The forward-looking information and statements contained in this release represent our expectations as of the date of this release. We disclaim any intention or obligation or undertaking to update or revise any forward-looking information or statements whether as a result of new information, future events or otherwise, except as required under applicable securities laws.
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i The Company has presented revenue and gross profit amounts for the Copper Alloys operations as they are indicative of how the ability of the Copper Alloys business to generate a contribution has improved since 2020. The Company does not believe it is possible to estimate with any accuracy what the profitability of IBC would have been in prior periods without the EM division. The historical results presented do not necessarily provide an indication of expected future results.
